Authored by the expert who managed and guided the team behind the Colombia Property Pack
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What do the latest numbers reveal about Bogotá’s real estate market? Are property prices on the rise, or are they stabilizing? Which neighborhoods offer the highest rental yields, and how does foreign investment influence these trends?
We’re constantly asked these questions because we’re deeply involved in this market. Through our work with developers, real estate agents, and clients who invest in Bogotá, we’ve gained firsthand insights into these trends. Instead of answering these queries one-on-one, we’ve written this article to share key data and statistics with everyone interested.
Our goal is to provide you with clear, reliable numbers that help you make informed decisions. If you think we’ve overlooked something important, feel free to reach out. Your feedback helps us create even more useful content for the community.
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1) In Bogotá's city center, the average price per square meter is between COP 5,000,000 and COP 8,000,000
In Bogotá's city center, the average price per square meter is a hot topic for potential buyers.
In neighborhoods like Chapinero and Santa Barbara, known for their vibrant culture, prices typically range from COP 5,000,000 to COP 8,000,000 per square meter. These areas are highly desirable, which naturally drives up the cost.
According to the Global Property Guide, house prices in these neighborhoods range from around COP 5 million to COP 9 million per square meter. This aligns with data from La República, which confirms the average price range and notes an 8.29% increase since 2020.
The demand for housing in the city center is fueled by its proximity to cultural attractions and amenities, making it a prime location for those seeking a lively urban lifestyle. This demand is a key factor in the higher price range observed in these areas.
For those considering a purchase, understanding these dynamics is crucial. The location and type of property significantly influence the price, with upper-middle-class neighborhoods commanding a premium.
Sources: Global Property Guide, La República
2) Bogotá's new house price index fell by 18.03% year-over-year in February 2023 when adjusted for inflation
In 2023, Bogotá's housing market saw a sharp decline, with new house prices falling by 18.03% when adjusted for inflation.
One major factor was the rapid increase in interest rates, which made borrowing more costly. This discouraged many potential buyers from taking out mortgages, leading to a noticeable drop in demand for new homes.
High inflation also played a significant role. As inflation rose, the purchasing power of consumers diminished, making it harder to afford new homes. This further reduced demand, pushing house prices down even more.
Adding to the complexity, the volatility in exchange rates created uncertainty in the market. Both buyers and investors became more cautious, further impacting the housing market negatively.
These economic challenges combined to create a perfect storm, leading to the significant downturn in Bogotá's housing market during this period.
For those considering buying property in Bogotá, understanding these factors is crucial. The market's current state reflects a mix of economic pressures that have shaped the real estate landscape in the city.
Sources: Global Property Guide
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Colombia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
3) Bogotá's new house price index dropped by 7.15% in February 2023 compared to last year
In February 2023, Bogotá's new house price index dropped by 7.15% compared to the previous year.
This decline wasn't isolated to Bogotá; it was part of a nationwide trend affecting major Colombian cities like Cali and Medellín. The main culprits were rising interest rates, high inflation, and exchange rate volatility, which made borrowing more expensive and reduced the purchasing power of potential buyers.
The Colombian property market was also slowing down due to decreasing demand and weakening residential construction activity. In 2022, the number of new homes sold in Colombia had already dropped significantly, and this trend continued into early 2023, with housing sales plunging further.
As fewer people were buying homes, the demand for new properties fell, contributing to the decrease in house prices. This situation was exacerbated by the economic environment, which made it challenging for potential buyers to secure financing.
In this context, Bogotá's housing market reflected broader economic challenges, with the 7.15% drop in the new house price index highlighting the impact of these factors on the real estate sector.
Sources: Global Property Guide, DNP Colombia, Banco de la República Colombia
4) New housing supply in Bogotá has risen by 15% over the past two years
The supply of new housing units in Bogotá has increased by 15% over the past two years.
Bogotá's population is on the rise, with an estimated 11,658,200 residents by 2024. This growing number of people naturally boosts the demand for housing, as everyone needs a place to call home. Developers are stepping up to meet this demand by adding more housing units to the market.
There's a noticeable trend towards smaller apartments in Bogotá. These units are not only more affordable but also quicker to build. This shift allows developers to pack more units into the same space, effectively boosting the overall supply of housing.
Government initiatives are also lending a hand. By increasing the Loan to Income ratio and maintaining subsidies for social housing, the government is making it easier for people to buy homes. This support encourages developers to build more units, knowing there's a market ready to buy.
Even with some ups and downs in house prices and a recent slowdown in the property market, these combined efforts have led to the 15% increase in new housing units. The focus on smaller, more affordable apartments and supportive government policies are key drivers.
Sources: Bloomberg Linea, World Population Review, Global Property Guide
5) Colombia’s residential real estate market is expected to hit USD 2.12 trillion in 2024
Colombia's residential real estate market is projected to hit USD 2.12 trillion in 2024.
Urbanization is a major driver of this growth. As more Colombians move to cities, the demand for housing has surged, pushing up market values. The expanding middle class, with its increased purchasing power, is also snapping up more homes, further boosting the market.
Tourism is another key factor. With a rise in visitors, there's a growing need for short-term rentals, which has positively impacted the real estate sector. Foreign investors are also eyeing Colombia, drawn by its political and economic stability and favorable property laws.
Colombia's appeal to international buyers is not just about stability. The country offers a diverse range of properties, from city apartments to countryside villas, catering to various tastes and budgets. This variety makes it an attractive option for both local and foreign buyers.
Moreover, the government has implemented policies to support the housing market, such as incentives for first-time buyers and infrastructure improvements. These efforts have made it easier for people to invest in real estate, contributing to the market's growth.
Sources: Golden Harbors, Sectorial, BBVA Research
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6) Residential properties in Bogotá with solar panels are expected to increase by 50% by 2025
In Bogotá, the adoption of solar panels for homes is on the rise, with a 50% increase expected by 2025.
Back in 2023 and 2024, Colombia saw a surge in small-scale renewable energy, including solar panels. By the end of 2024, the total capacity was projected to hit 752 MW, enough to power 1.6 million Colombians. This shift reflects a growing demand for cleaner energy sources.
Companies like Arquitectura y Concreto are jumping on board, partnering with solar providers to offer energy solutions that cut costs and boost sustainability. This collaboration marks a significant move towards solar energy in residential areas, even if the exact 50% increase isn't directly mentioned.
Government support is a key driver in this transition. Colombia's energy policy is increasingly focused on renewables, aiming to add 4 GW of renewable energy to the regional goal of 312 GW by 2030. This includes major investments in solar and wind power, laying a strong foundation for solar growth in Bogotá.
These efforts are part of a broader strategy to embrace renewable energy, with solar power playing a crucial role. The government's commitment and corporate partnerships are paving the way for a more sustainable future in Bogotá.
Sources: Valora Analitik, Colombia Construye
7) Residential properties in Bogotá offer an average rental yield of about 6%
In Bogotá, the average rental yield for residential properties is about 6%.
This yield can vary greatly depending on the neighborhood's socioeconomic status. In areas with lower socioeconomic levels, rental yields are typically higher because there's a strong demand for rentals but not enough supply, pushing rental prices up compared to property values.
The document "rentabilidad de la vivienda para arriendo en Bogotá 2019-2021" shows that historical housing price trends have shaped rental yields. Over the years, the rental-to-sales ratio has decreased, eventually stabilizing at the current yield levels.
Investors often weigh the benefits of buying to rent against buying to sell. The document provides a detailed analysis of these strategies, helping investors grasp the rental market's dynamics and potential returns.
Understanding these factors is crucial for anyone considering property investment in Bogotá. The insights from the document can guide decisions by highlighting how rental yields are influenced by market trends and socioeconomic factors.
For those looking to invest, knowing that rental demand is high in certain areas can be a significant advantage. This demand, coupled with limited supply, often results in better rental yields.
Sources: Document on Rental Yield in Bogotá
8) Colombia has over 16 million housing units, with around 40% in Barranquilla, Bogotá, Cali, Cartagena, and Medellín
Colombia boasts over 16 million housing units, with nearly 40% nestled in the bustling cities of Barranquilla, Bogotá, Cali, Cartagena, and Medellín.
These cities are not just homes; they are economic powerhouses that draw people in with job opportunities and a promise of a better life. The influx of people naturally demands more housing, creating a vibrant real estate market.
Life in these urban centers is appealing because they offer a wealth of amenities like top-notch schools, hospitals, and entertainment options. This makes them attractive places to settle down, further driving the demand for housing.
Urban planning and real estate development are heavily concentrated in these areas, leading to a higher density of housing units. Developers focus their efforts here, knowing the demand is strong and the potential for growth is significant.
For anyone considering buying property in Colombia, these cities represent prime locations due to their economic vitality and comprehensive amenities. The housing market here is dynamic, reflecting the cities' roles as cultural and economic centers.
Understanding the landscape of Colombia's housing market means recognizing the strategic importance of these urban areas. They are the heartbeat of the country's real estate sector, offering both challenges and opportunities for potential buyers.
Sources: Global Property Guide, El Espectador
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Colombia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
9) Residential property prices in Colombia's major cities are expected to rise gradually
Colombia's residential property prices in major cities like Bogotá are on a slow and steady rise in 2023 and 2024.
In Bogotá, new housing prices saw a nominal annual increase of 6.99% as of March 2024. This is a bit lower than the 8.6% rise recorded in March 2023, showing a gradual but consistent upward trend. The real estate market in Colombia is expected to hit USD 2.12 trillion in 2024, driven by urbanization, a growing middle class, and more tourists.
These factors are keeping the demand for residential properties strong, which helps maintain a steady increase in property prices. In Bogotá, neighborhoods like Chapinero and Santa Barbara are seeing property prices between COP 5 million to COP 8 million per square meter, indicating a steady appreciation in property values.
Regional variations show that cities like Bogotá and Medellín are experiencing a steady rise in property prices, largely due to economic and infrastructural developments. This trend is supported by the ongoing urbanization and the influx of a growing middle class, which are key drivers of the real estate market.
As these cities continue to develop, the demand for housing remains strong, contributing to the gradual increase in property prices. The steady rise in property values in Bogotá and Medellín reflects the economic growth and infrastructural improvements in these areas.
Sources: Viventa, Global Property Guide, Departamento Nacional de Planeación, Golden Harbors
10) Around 250,000 new homes are entering Colombia’s market this year, including 177,000 social housing units (VIS)
In 2023, about 250,000 new homes are expected to enter the Colombian market, according to Camacol.
Of these, 177,000 will be social housing units, part of the Vivienda de Interés Social (VIS) program, which aims to provide affordable homes for lower-income families. This initiative is crucial for addressing the country's housing deficit and making homeownership more accessible.
Camacol's projections are based on data from their Coordenada Urbana system, which monitors over 18,000 construction and sales projects across Colombia. This comprehensive tracking helps ensure that the housing market's growth aligns with the country's needs.
The Global Property Guide also supports these projections, highlighting the challenges the market faces, such as high inflation and interest rates. These economic factors can impact both the construction industry and potential homebuyers, making it essential to have accurate data and forecasts.
Despite these challenges, the focus on social housing is a positive step. By prioritizing affordable housing, Colombia is working to reduce the housing deficit and improve living conditions for many families.
As the year progresses, the success of these initiatives will depend on how well the market adapts to economic pressures and continues to support the construction of new homes. Monitoring these developments closely will be key for potential buyers and investors.
Sources: Camacol Projections, Global Property Guide
11) Housing units approved for construction nearly doubled to 156,938 in 2023
The number of housing units approved for construction in Bogotá almost doubled to 156,938 units in 2023, thanks to a surge in social housing projects.
These social housing projects, known locally as "Vivienda de Interés Social" (VIS), have been a game-changer. In 2022, housing approvals had already seen a 44.9% increase to 319,583 units. Although the first two months of 2023 experienced a slight dip of 4.8% to 34,927 units, the year overall showed a remarkable growth in VIS apartments. This wasn't just about the number of units; the area approved for construction reached 9.76 million square meters.
Social housing is a big deal in Colombia, making up a major part of new home sales. It's driven by public subsidies and supportive housing policies. This focus on VIS has been key in boosting the number of approved housing units, showing the government's commitment to tackling housing needs.
In Bogotá, the emphasis on VIS is not just about numbers. It's about creating affordable living spaces for many families. The government's push for these projects is evident in the nearly doubled approval rate for housing units in 2023.
Public subsidies have made these homes more accessible, encouraging developers to invest in VIS projects. This has led to a significant increase in construction activity, with more areas being developed to meet the demand.
Overall, the trend in Bogotá reflects a broader national strategy to provide affordable housing. The focus on VIS is a testament to the government's efforts to ensure that more Colombians have access to decent living conditions.
Sources: Global Property Guide, Catastro Bogotá
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12) By 2025, 30% of Bogotá's homes are expected to have home automation systems
In Bogotá, the adoption of home automation systems is on the rise, with 30% of residential properties expected to have these systems by 2025.
Back in 2023, the global market for home automation was booming, with a compound annual growth rate of over 12% projected from 2020 to 2025. This trend was especially evident in Latin America, where cities like Bogotá were starting to embrace smart home technologies. The region's enthusiasm for these innovations was part of a larger global movement.
By 2024, the global smart home automation market was anticipated to exceed $94 million, reflecting strong consumer interest. This surge was fueled by the availability of affordable smart devices and the desire for better security, energy efficiency, and convenience. As Bogotá residents became more aware of these benefits, the demand for home automation systems naturally grew.
While specific data for Bogotá wasn't readily available, the overall trend in Latin America pointed to a rising adoption rate in major cities. This regional growth, coupled with the global market expansion, made it plausible for Bogotá to achieve a 30% adoption rate by 2025.
In Bogotá, the appeal of smart home technologies is clear. Residents are increasingly drawn to the idea of enhanced security and energy efficiency, which are key selling points for these systems. The city's growing interest mirrors a broader trend across Latin America, where urban areas are rapidly integrating these technologies.
As the market continues to expand, Bogotá is poised to become a leader in smart home adoption in the region. The city's embrace of these technologies is part of a larger shift towards more connected and efficient living spaces, aligning with global trends.
Sources: AVI Latinoamérica, International Living, Repositorio UChile, Wise
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.